Seattle, WA — Small and medium-sized businesses (SMEs) are concerning about ongoing tariffs and how they are impacting profits, while also focusing on international markets to drive sales in the coming year and offset the tariffs, according to the 2019 International Business Trends Survey, conducted by DHL Express.
Key findings compiled from the more than 8,500 responses, include:
Tariffs are a major concern and are impacting profits. When asked what business are most concerned about this year in regard to international trade, almost half (47 per cent) of respondents said tariffs. Just 13 per cent said they were most concerned about Brexit and 7 per cent said the USMCA.
Additionally, a majority of respondents (56 per cent) said the recent changes in tariff policies have had a moderate or significant impact on their business operating costs.
Diversification is imperative. Businesses are recognizing that in order to offset declines as a result of tariffs, they should be expanding their international audience and entering more global markets. That’s why 40 per cent of respondents said in order to drive more sales this year, they are focusing on additional international markets.
Canada and Mexico are looking more and more attractive. Which markets are most appealing? An overwhelming majority (55 per cent) said both Canada and Mexico are a top priority for their business this year. This is likely because of their proximity to the U.S. and existing deep trade relationship with the U.S., but also because of the United States-Mexico-Canada Agreement (USMCA), which will provide important benefits to U.S. exporters and importers upon its final ratification.
Also garnering top interest according to survey respondents was Asia. Despite the tariffs placed on U.S. exports to China, 21 per cent of respondents said they are making Asia a top priority for business this year—however many companies are likely looking at other growing Asian countries like Vietnam and India.
E-commerce is King. Almost one-third (30 per cent) of respondents experienced 34-100 per cent YOY (from 2017 to 2018) growth in international e-commerce sales, and that growth is only expected to continue throughout 2019.
Focus on fast shipping. Over one-third (34 per cent) of respondents are focusing most this year on faster shipping options to drive sales.
Anything but trade barriers. International trade barriers and constant changes to trade regulations are more than just a headache for business owners—they can have a major impact on sales and operations. That’s why all respondents were willing to go to great lengths to ensure they don’t have to worry about those issues:
45 per cent would rather have their in-laws move in than have to worry about international trade barriers/regulations for their business.
31 per cent would rather give up their smartphone for a month
19 per cent would rather get audited by the IRS
15 per cent would rather get 100 scathing business reviews